In a front-page story in Tuesday’s Washington Post, Jia Lynn Yang documented how a corporate shift toward maximizing shareholder value has hurt communities such as Endicott, N.Y., the birthplace of IBM. At its peak, the company employed 10,000 people there. Now there are only 700 IBM employees.
“It used to be a given that the interests of corporations and communities such as Endicott were closely aligned,” Yang wrote. “But no more. Across the United States, as companies continue posting record profits, workers face high unemployment and stagnant wages.”
IBM is emblematic of a broad shift in corporate values that some say is contributing to what has become a largely jobless recovery. Over the weekend, Pittsburgh Tribune-Review owner Dick Scaife lamented a local example of that shift: Bank of New York Mellon, on whose board Scaife once sat, will soon have just one Pittsburgh branch, down from the nine the bank had in the area several years ago.
“[Corporate] loyalty and financial interests are no longer tied to a community, a region, or even our nation,” Scaife wrote. “Instead, they are concerned with a few directors or key investors — and with profit, first and foremost.”
Whatever the reason, the shift away from communities is reflected in the data. Of the majority of states that saw the number of businesses per capita shrink over the past two decades, 16 lost two or more firms for every 1,000 residents. The hardest hit among those — Nevada, Arizona and Tennessee — each lost about 3.5 businesses for every 1,000 people. Only one state, Montana, gained more than two firms per 1,000 people.